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...equal to our economic success

by PeWi Sun Oct 16th, 2005 at 11:30:01 PM EST

one word of warning. I am not an economist or do I know much about Geman newspapers, but I thought this little note I am about to discuss, fits quite well into the discussion we are having here.
Background in German

In the moment there is an expected take over bid for the Berliner Zeitung through, Mecom by David Montgomery and 3i with Veronis, Suhler, Stevenson.
In reaction to that the editors published a statement, basically saying, Please don't sell us to the vulture capitalists, since you seem to need to sell us, please sell us to another publisher.

Their key reason: Publicistic ambitions, that are equal to the economic interests. ... it is not their aim to maximise the rate of return for the owners, they want to become the first true, unified newspaper in Germany. Something they think, they will not be able to realise with an investor that expects a 20% return, and has ambitions to "simplify" the Germany Newspaper market.

The attitude of the editor is not really surprising, but it is interesting, that he makes this clear distinction. He of course states, that it still is a sound economic business. Returns are not its highest interest but its distribution...

One more word to the German newspaper market:

Everybody that looks at Germany knows it has a complicated structure, that same is valid for its news world.

The third most popular/respected newspaper in the world, after the Financial Times and the Wall Street Journal is the Frankfurter Allgemeine Zeitung. It is own by a Foundation to guarantee its independence. This is however not the biggest daily broadsheet.  That is the Sueddeutsche Zeitung with about 440.000 printed issues.  

The Sueddeutsche is being printed out of Munich. There are also a number of other very strong regional newspapers. (Leipziger Volkszeitung, f.e)

But as it becomes obvious, Germans leading newspaper never came out of the capital. (unlike Britain, or France. Is there another European Country where this is the case?)

There are of course the Berliner Zeitung, the Tagespiegel and the Tageszeitung (as well as the Neues Deutschland - the PDS newspaper) all out of Berlin. however, they lack the distribution of Sueddeutsche and Faz.

by PeWi on Sun Oct 16th, 2005 at 11:36:28 PM EST
I wonder whether the editors, the rest of the employees and the readers could muster enough cash (or a loan) to buy the newspaper themselves as a cooperative.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Mon Oct 17th, 2005 at 07:55:04 AM EST
That would be great...a cooperative paper!

I have fears of the US corporate news type-conglomerate coming to Europe and screwing up the news here too...

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia

by whataboutbob on Mon Oct 17th, 2005 at 12:45:04 PM EST
[ Parent ]
Yes, but could they muster the necessary cash to do it? The editors certainly have the motivation to try, and so do the employees. If the editors' vision for the paper appeals to the reader, they too have a stake. We're talking several hundred thousand people already. Can each of them afford a €100 share in the cooperative? Is a few multiples of €10M enough to buy the paper?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Mon Oct 17th, 2005 at 12:54:01 PM EST
[ Parent ]
David Montgomery. Who is this guy? - There is an interesting article in the Frankfurter Allgemeine Zeitung. Some facts:

In 1987, Robert Murdoch made him chief editor of the "today". One of his first activities there was to change an article reporting about the Labour Party's opposition against Murdoch's takover into an attack on the critics of the deal.

In 2003, after he had bought the Belfast newspaper "News Letter", he showed up in the editorial office. He is said to be the author of the leading article "Put the Pride back in Protestant", in which he encouraged his fellow Unionists who were disappointed by too many concessions to Irish nationalists.

Apart from his history of interfering with editorial affairs of his publications, Montgomery is being criticised also as an economically unsuccessful, uninspired manager. "Looking back on his career, it seems that Montgomery does not know any other discipline than cuts and savings." He managed to rehabilitate the Mirror-Group, but when challenged by Mordoch in a price war in the 1990s, he was helpless. It is interesting to note that the investors of Trinity-Mirror forced him to step back in 1999.

As it seems to me, there is enough reason for the Berliner Zeitung to be sceptical about this deal.

by Saturday (geckes(at)gmx.net) on Mon Oct 17th, 2005 at 05:45:42 PM EST
Thanks for this Saturday. - Very intersting indeed.
by PeWi on Mon Oct 17th, 2005 at 07:03:05 PM EST
[ Parent ]

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